M&A Trends; WPP Gets Flexible

Here’s today’s AdExchanger.com news round-up… Want it by email? Sign-up here.

What’s With The M&A?

The NY Times explores the recent mergers and acquisitions trend – and what it means. NYT writers explain, “To some on Wall Street, the deal-making may not in fact be an indicator of golden years ahead. Optimism about economic growth may not be the sole driver of the boom in acquisitions, they assert. Instead, some chief executives may have come to view takeovers as the only way to obtain big increases in revenue in a still lackluster economy. If the deals then disappoint, the economy could also suffer.” Read it.

Flexibility Is Key

Some marketers have a beef with WPP’s programmatic arm Xaxis, particularly where it comes to taking a position on media and with its requisite nondisclosure agreements. Ad Age reports that WPP recognizes the tension, and is offering a more flexible automation option – in the hopes clients aren’t tempted to take programmatic buying in-house. “We’ll go back to clients who previously may have said, ‘We won’t use Xaxis,'” explains GroupM Chief Digital Officer Rob Norman, “and say we’re creating value here, and here’s a mechanism for clients to test Xaxis inventory in the open market against other inventory sources.” Read more.

Missing Direct Sales Demand

Demand Media, whose owned and operated sites include eHow.com and Livestrong.com, reported its second-quarter earnings late last week. Revenue (excluding traffic acquisition costs) was $87.1 million, a 10% decrease YoY. Advertising revenue saw a similar decline, at $31 million, a 33% decrease YoY. Interim CEO Shawn J. Colo attributed the figures, in part, to the company’s strategic shift to programmatic solutions, “which currently have a lower CPM than higher-touch direct ad sales.” But despite the decline in revenue, Colo was satisfied with how automation has helped to grow Demand Media’s business. “We’ve seen some real traction in terms of onboarding clients,” said Colo. “I think we tripled the number of live deals during the quarter, now we’ve got a couple hundred brands and agencies who are looking at our inventory.” Seeking Alpha has the transcriptor see the earnings report.

Programmatic News Corp.

News Corporation’s quarterly revenue fell short of projections, at $8.6 billion, a 4% decrease YoY. The Q4 earnings come at a time of transition for the behemoth publisher, as the corporation seeks to diversify its revenue streams and expand its digital foothold through a series of strategic acquisitions. During the call, CEO Robert Thomson shared with investors a strong focus on automation. “We successfully launched the global programmatic advertising exchange,” he said, “which has helped us cut out third-party networks and allowed us to work directly with advertisers who want to reach our premium audiences.” Taking ownership of data, said Thomson, is key. Read the transcript.

Square-ly In Marketing Tech

On his personal blog, Opus analyst Greg Sterling posits that the future of payment tech company Square may be in marketing services for the SMB market. Sterling notes a few products already in market and adds, “It would not that far-fetched for Square to follow GoDaddy, for example, into marketing services. Most SMBs want to work with one trusted provider. When they find that company or individual they start asking for all kinds of additional advice and services.” Read more. Seems reasonable – along with the fact that former Google AdSense and Facebook ads engineering guru Gokul Rajaram leads tech development over at Square.

Messaging Ads

China’s new restrictions on messaging services may have a silver lining for Chinese holding company Tencent. At least for advertising, says the WSJ. The new rules will censor the kinds of messaging accounts that can post political news, creating “official accounts” instead. Tencent owns WeChat and QQ, and the messaging services are dominant among Chinese users. But the company’s tight identification policies might drive up the value of the messaging app’s user data from a marketing perspective. Read more (subscription).

But Wait. There’s More!